This paper proposes solutions for distributed protection applications, to improve current and design of future protection schemes. This solution utilises advantages of fast and reliable peer-to-peer communication of IEC 61850 and interoperability and configurability of IEC 61499. The integration of the two standards improves protection schemes by decreasing fault clearing times and minimizes the effect of short circuit faults on sensitive loads. Additional advantages include the reductions of the number of hard-wired connections, especially in a large substation where all protection IEDs has a significant number of binary inputs and relay outputs. IEC 61499 is an open standard for designing distributed control systems to promote portability, interoperability and configurability, i.e. vendor independent, flexible and robust solutions. IEC 61499 can be used to represent programmable logic of power system devices, in a standard form and in a vendor independent way. The proposed distributed protection system is implemented and simulated using the developed co-simulation environment.